This is India’s Taiwan moment, there is no turning back: Bharat Semi founders

New York: President Joe Biden and PM Narendra Modi’s announcement of a new semiconductor fabrication unit based on a strategic knowledge partnership between the US Space Force, 3rdiTech, and Bharat Semi has infused new energy, both in the India-US bilateral space as well as India’s semiconductor aspirations.
Vrinda Kapoor is the CEO and co-founder and Vinayak Dalmia is the managing director and co-founder of Bharat Semi, the larger holding company, and 3rdiTech, the vertical, that will set up the fab. HT interviewed the two entrepreneurs, over email. Edited excerpts:
What’s the significance of the announcement of the semiconductor fab that the India-US joint factsheet has announced and your company is involved with?
Dalmia: If I were to describe the significance of this fab in one sentence, I would say it is the single-most essential step towards self sufficiency in the military. India currently depends 100% on imports for these types of semiconductors. The current import bill is over a billion dollars a year and these semiconductors all fall under stringent export control regulations. This is the first chance we have as a country to bring home this kind of a technology transfer. That is the gravity of this announcement. It is a landmark, game changing outcome for the country. A US-India partnership on these extremely critical and controlled technologies makes this announcement the second most significant US-India handshake after the civil nuclear agreement.
Can you tell us about your engagement with US national security establishment, especially its defence forces, and how this project came to fruition? What is the US Space Force helping you with?
Kapoor: We have been working with the US military for the last five years. This kind of partnership — a technology partnership of some of the most highly controlled defence technologies — comes from a lot of trust which is established by working together over a long period of time. This is not a unilateral partnership. It is an opportunity for us to give back — with our strengths in numbers and in semiconductor design — to support Space Force and build a lasting partnership for mutual benefit.
How does this project fit into India’s semiconductor aspirations and how will it help India’s goals?
Dalmia: One word: Atmanirbhar Bharat.
In the post-Covid world, every country has realised that national security touches every aspect of our life. We now have the broadest understanding of national security in human history. From supply chain to vaccines to conventional military tech, it is all now part of the national security architecture. Nowhere is this more pronounced than in semiconductors.
If every semiconductor device in defence is imported, we can never be truly self-sufficient. However, if we are able to manufacture, and, over time, design these semiconductors in India, we reduce imports, we reduce strategic dependence, we build our own intellectual property, and we become globally competitive.
The former Chief of Army Staff, General Manoj Pande, commented earlier this year that the answer lies in being “self-reliant and achieving self-sufficiency in critical technologies through indigenous development”. Being Atmanirbhar is both home-grown and also home-owned. It is not about just tech nationalism as the popular narrative goes. It is about survival. For far too long, India has had the scars of technology-denial in times of severe need. Strategic vulnerability is a very strong reality. We cannot wait for another war, or sanctions, or another pandemic, to hit us in the face. We need to raise this bar from a trader to producer mindset to secure our borders and be a force of good in the world. The India critical tech build out, including semiconductors, is an exercise in just that.
While explaining the significance of this deal to HT, foreign secretary Vikram Misri spoke about how your company is a pioneer in the domain. Can you take us through the vision that’s driven it and the long-term plan?
Kapoor: For far too long, India has been a consumer of technology and not a producer of one. There is a strong mandate to tilt that balance. The government has a vision of India becoming a net security provider and be a force of stability in the global order. For a country to become a net security provider, it needs to graduate to a net technology provider. India is changing and both 3rdiTech and Bharat Semi are a window to a changing nation. A public sector enabled, private sector led initiative to create a national project.
It is our conviction that meeting the needs of the strategic sector and public procurement, where there is a substantial government mandate to buy Indian, is the way to build a strong business that can compete at the global stage. Coupled with an R&D first mindset, it will enable us to build a strong balance sheet, build a moat, serve our nation, and grow to become globally competitive in under a decade. We believe that with this focused approach, we can build an organisation that can become a catalyst for India’s Taiwan moment and create faith in this ecosystem.
India has missed the bus for previous electronics waves due to a procurement first mindset where it was an easier decision to take less risk and procure, rather than take the risk to invest in bottom-up capability development. This is in contrast to the route Taiwan took in the 1980s and subsequently, where they used the smart phone wave to build behemoths across every sector of the electronics value chain. With India poised to become the largest consumer of semiconductors by 2030 — 10% of the global semiconductor consumption at about $110 billion will be in India — it is time for India to invest in India.
In this particular case, we will be manufacturing for three main technology areas: Infrared, Gallium Nitride and Silicon Carbide. For national security, the focus is on the three essential pillars for the modern war fighting — advanced sensing, communications, and power electronics. These three areas also have huge growing needs for commercial sectors such as railways, telecom infrastructure and data centres and green energy. We have the market; we have an administration that has given us the mandate, there is no turning back from this. With this technology partnership, India will join a handful of elite nations with the capability and knowhow to manufacture these types of semiconductors on shore.
Why Bharat Semi?
Dalmia: Article 1 of the Indian Constitution states “India that is Bharat.” Bharat in the name, signifies the larger, bolder vision for the organisation. A pursuit of something that is far larger than any individual .The name “Bharat Semi” symbolises the ambition to build a company that has a purpose and that purpose is serving national interest. No nation can truly be independent without a certain amount of expertise in chip design and chip manufacturing. Certainly not a country of India’s scale and ambition.
With an ageing global work force on semiconductor design, massive supply chain instability and the growing technology denial diplomacy in the world, this is the right time for India to have bigger ambitions. And Bharat Semi signifies just that. Part of the ambition behind Bharat Semi is to build an India behemoth at the global stage, a deep tech, strategic asset that India can be proud of.
What’s the message this sends about Indian startups and India-US collaboration?
Dalmia: Timing is everything. This time is indeed different. With bold policy reforms and strong bilateral international partnerships, the government has unleashed young India’s animal spirits to build critical technology while also being in national interest. This is happening for the first time in India — where young startups and ambitious founders are unleashed by the government to build technology in national interest. Never before has profit been so closely aligned with purpose.
Geopolitically as well, this is India’s time to shine. Nowhere is this more significant than with the US. iCET or Initiative on Critical and Emerging Technologies is a substantial break from the past, where the private sector has been asked to team up and partner with governments at the highest levels engaging with industry, imploring them to partner. Just two weeks ago, at a US-India defence tech start up summit in Stanford, the Commander of the US Space Force, Gen Stephen N Whiting said that our partnership has reached “escape velocity”.
There has never been a better time to engage on the India-US collaboration — for startups, for larger companies. The stage has been set and the actors all engaged. It is time for us to bring home many more victories and do our own part in building an India of the future.